How Medinah’s proposed tax cut could cost schools

Medinah Country Club officials are appealing property assessments for the past three years, which could net rebates of roughly $1 million if successful and shift more of the tax burden onto neighbors in the future.Daily Herald File Photo

Medinah Country Club officials are appealing property assessments for the past three years, which could net rebates of roughly $1 million if successful and shift more of the tax burden onto neighbors in the future.Daily Herald File Photo

Medinah Country Club officials are appealing property assessments for the past three years, which could net rebates of roughly $1 million if successful and shift more of the tax burden onto neighbors in the future.Bev Horne | Staff Photographer

The exclusive Medinah Country Club's lush, rolling greens have played host to celebrities and golfing elites throughout their storied history, including in 2012 when the PGA Tour's Ryder Cup was held there.

In addition to being listed among the top courses in America, Medinah is one of the top property taxpayers for nearby schools, libraries and parks, among other public amenities.

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But if Medinah officials have their way, those schools and other local government entities will have to give back nearly $1 million to golf course operators, who say Medinah's tax assessment was far too high for the past three years.

It would also shift that tax burden onto the private golf course's mostly residential neighbors in the future.

In 2013, the country club's property tax bill amounted to $391,554, according to assessment records from Bloomingdale Township. If the appeal is successful, the tax bill could shrink to $84,257, a 78.5 percent decrease.

"There's a lot at stake," said Jeff O'Connell, assistant superintendent for business affairs at Lake Park High School District 108. "When a top 10 taxpayer in your district is asking for a reduction, it has an impact. And this is a significant reduction."

Lawyers for the country club have appealed assessments for 2011, 2012 and 2013, and are seeking rebates for taxes already paid, as well as lower taxes in the future.

The country club is made up of a dozen parcels that were assessed at nearly $5.4 million in 2012. In their appeal, Medinah officials requested an assessment of less than $1.2 million.

District 108's share of Medinah's property taxes -- $127,577 -- was the highest of the 20 government agencies that receive tax revenue from the country club.

If the reduction is granted, District 108 would only be able to keep $27,422 of the taxes paid in 2013 and would have to refund more than $100,000.

The school district also would have to rebate similar amounts the country club paid in 2012 and would see a sharp cut in taxes received this year.

Officials and lawyers from the country club did not return calls seeking comment about the tax appeal.

Medinah Elementary District 11 is the second-largest beneficiary of the country club's tax revenue, having received $119,926 last year.

"We always talk about teacher salaries and our average is around $60,000," said Medinah Elementary District 11 Superintendent John Butts. "So that amounts to a couple teachers."

If the appeal is successful, Butts' district would keep just $20,170.

Many of the government agencies that receive tax revenue from Medinah Country Club have formed a consortium to fight the appeals. Officials from just the two school districts said they've combined to pay roughly $9,000 in legal fees and private appraisals so far, with those costs expected to double by the time the case concludes.

Medinah officials are basing their appeal on the state's disputed definition of "open space." State law allows golf courses to be classified as open space for assessment purposes. Township assessors, county boards of review and the state's Property Tax Appeal Board have always maintained that the open space designation only applies to golf course land that is either undeveloped or used for actual golfing.

Lawyers for the Onwentsia Golf Club in Lake Forest challenged that definition in 2006 and argued that land with buildings, parking lots and additional improvements helped conserve all the other open space and should be considered open space by proxy.

An appellate court ruled the club's case had merit, but didn't overturn rulings by the appeal board, the Lake County Board of Review or the local township assessor.

"The main problem we note with the PTAB's decision is that it never comes to terms with the meaning of 'conserve,'" the appellate court wrote in a 2011 decision.

The state's Supreme Court refused to hear the case, so it's back before an appellate court, according to PTAB Executive Director Louis Apostol.

"We thought we had it right the first time," he said. "We're seeking a road map for how we look at these cases in the future."

Apostol said two proposed legislative bills would clarify what type of golf course land could be deemed "open space." One bill, sponsored by Democratic state Rep. Michael Zalewski of Chicago, would prevent private golf courses from seeking open space classification for parcels with buildings or other improvements.

Apostol noted that in addition to Onwentsia and Medinah, White Eagle Country Club on the border between Naperville and Aurora -- as well as North Barrington's Biltmore Country Club -- are appealing their assessments on similar grounds.

"There could be more," he said. "If you're a creative tax lawyer, you're going to shade the law toward your client."

Successful appeals mean taxing bodies lose money they were paid. School districts have a mechanism to recapture some of those lost funds through state aid, but other government agencies are simply out of luck, said DuPage County Supervisor of Assessments Craig Dovel.

Moreover, if golf course property values are reduced, tax levies are not. That means neighboring property owners in those taxing districts would have to cover the loss of tax revenue from the golf courses, Dovel explained.

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